Starbucks, the premium-coffee giant, sells Licensed Stores rather than franchises to qualified businesses, preferably well-established in the retail coffee or food services industry. Applicants may complete an online application and are qualified based on an evaluation of their financial profile.
Starbucks does not sell Starbucks franchises to individuals, but qualified businesses already engaged in retail or food service may integrate a Starbucks Licensed Store within their existing business. Licensed stores are indistinguishable from the Starbucks corporate store and are often kiosks located in supermarkets, schools, airports and many other large public places.
TL;DR (Too Long; Didn't Read)
If you want to open your own Starbucks franchise, you're out of luck. Starbucks does not franchise to individuals. But you might qualify for a licensed kiosk in your existing retail business.
Licensed Store Application
Starbucks does not publicize its qualifications for opening a Licensed Store. However, you can submit an application online at “Apply for a Licensed Store" on the Starbucks website. Detailed personal and business information is required, including your assets, liabilities, net worth and non-borrowed funds available for investment. Not surprisingly, preference is given to well-established businesses in the retail coffee and food service industry. They're also looking for spaces in desirable locations, such as an airport. Before applying, it would be helpful to visit existing Starbucks stores and other similar coffee franchises.
Desired Licensee Profile
The application also asks if you have ever applied for a Starbucks Coffee Company License and how many sites the current application is for. This suggests that Starbucks is looking for experienced owners and may prefer potential owners with sufficient assets to own multiple sites – a growing trend among franchisers. While a Starbucks Licensed Store is not a franchise, the actual operation and oversight of the two are very similar.
Research Comparable Franchise Costs
Starbucks offered franchises with Seattle's Best Coffee, one of its top, wholly owned subsidiaries, until 2014, when it closed the last franchisee store. Since then, Seattle’s offers franchises under its own brand. A review of their franchise requirements in 2017, according to Franchisegator, and in 2016 from the online magazine, Entrepreneur, may give you a general idea of the costs that could be associated with opening a Starbucks Licensed Store.
In 2017, the total investment for a Seattle’s Best Coffee franchise ranges from $181,835 to $445,035. The net worth requirement is $1 million and the liquid capital requirement is $125,000. In 2016, the initial franchise fee was $25,000, a one-time, upfront fee paid to the franchisor to join the system. This fee may be higher based on territory size and other factors. Entrepreneur also reported the 2016 ongoing royalty fees were 4 percent with an ad royalty fee up to 3 percent. It may be helpful to contact Seattle’s Best Coffee for any updates on these figures and to also review the fees of other premium-coffee-brand franchises before applying to Starbucks.
- Starbucks Branded Solutions: Licensed Stores
- Forbes: Five Reasons Why Franchise Ownership Is No Longer the American Dream
- Starbucks:Become a Customer
- Investopedia: Top 6 Companies Owned by Starbucks
- Franchisegator: Seattle's Best Coffee
- Herald Tribune: Licensing Can Be Faster, Cheaper Than Franchising
- Coriolus Research: Understanding Starbucks